Some Scottish Gas customers who are residing in the northern parts of Scotland are now reluctantly paying higher gas and electricity bills than the rest of the United Kingdom. This is due to a decision made by Centrica, who own the main arm of the company British Gas, to increase prices.
The price hikes for British Gas and Scottish Gas, which came into effect on November 23rd 2013, saw most customers hit by a 9.2% increase. However, those living north of Perth were dismayed to find they would be hit with even steeper hikes reaching an average of 11.2%. What is certain to cause upset in these areas of Scotland is the enormous difference compared to the South of England. In the South West, there is only been a 6.8% rise.
According to Scottish Gas’ owners Centrica, the reason why there is such a difference in the prices at the North of Scotland is due to network costs. It says that the company is obliged to pay transmission companies around the country to deliver energy to homes and businesses.
The rival energy provider in Scotland, SSE, also announced a slightly lower 8.2% increase in their energy prices around the same time.
Scottish Gas claimed it “understands the frustration” that many Scottish home and business owners feel towards the rising prices of gas and electricity.
The industry regulator Ofgem said that the prices are determined by the company’s suppliers competing in the energy market. It also conceded that there is nothing Ofgem can do; it is simply up to these providers to justify their prices to consumers.
A spokesperson for the regulator said:
Any price rise will not be welcomed by customers which is why it is important that Scottish Gas fully explain the reasons for the increase. Energy suppliers should be doing all they can to minimise the impact of these rising costs on energy bills by ensuring they are managing their costs as efficiently as possible. Suppliers must also ensure they are giving customers all the advice and help they need to save money on their energy bills, for example through energy efficiency.
Centrica has seen its share prices fall since it made these announcements, which many continue to feel is an unethical attempt to exploit their customers during a time of hardship. Their shares were at 353.40 at the end of October 2013. In January, they slumped by almost 10% to around 315.50.